Monday, 18 April 2016

Brexit and the nanny state

The Institute of Economic Affairs has today published a weighty tome entitled Breaking Up is Hard to Do. Over fifteen chapters, various commentators discuss what Brexit would mean for the UK in practice. This being the IEA, the focus is on whether things would be better or worse from the perspective of liberty and free markets.

I wrote the last chapter which - you will not be surprised to hear - is about lifestyle regulation/the nanny state/'public health'. I wanted to answer the question of whether life would be better or worse for an adult consumer who wants to eat, drink and smoke without being taxed, punished and stigmatised.

Looked at from this narrow perspective - and rather against my natural instinct - I had to conclude that the EU is not a bad thing. In fact, it is quite a good thing for three reasons:

Firstly, the common market allows British consumers to buy virtually unlimited quantities of alcohol and tobacco from the continent at prices that are almost invariably cheaper than they get at home.

Secondly, as a result of this price competition, there is a limit on how much the UK government can rip off consumers with sin taxes. As high as alcohol and tobacco duty is, it would probably be higher if we didn't have low duty markets on our doorstep.

Thirdly, the EU's free trade rules give consumers some sort of shield against their own venal, half-witted governments. For example, the EU has prevented minimum pricing legislation in the past and looks as if it will do so again in the case of alcohol.

Several caveats need to be added. This book has had an unusually long gestation. I originally wrote this chapter two years ago. At the time, it wasn't clear how the Tobacco Products Directive would pan out, in particular with regards to e-cigarettes. The ridiculous new rules on e-cigarettes (and normal cigarettes to some extent) are a major negative to balance against the positives.

The other issue is the possibility of the common market being undermined by a 'public health' carve out in which nanny state campaigners argue that free trade shouldn't apply when products carry a risk to health. This is the argument being used by minimum pricing advocates on the basis of Article 36 of the Treaty on the Functioning of the European Union (2007) which allows exemptions 'on grounds of public morality, public policy or public security', ie. nearly everything.

As I say in the book...

If the lifestyle regulation agenda is to progress at EU level, perhaps the best hope for campaigners lies in the exemptions set out in Article 36 of the TFEU for ‘the protection of health’. If risky lifestyle products are considered to be special cases, they might be subject to a different set of rules. Minimum pricing will provide an important test case. If the ECJ (or a national court) rules in favour of the Scottish government on the basis of Article 36, British public health groups expect it to ‘set an important precedent that could encourage Member States to introduce further public health legislation’. It would be a groundbreaking victory for lifestyle regulation over the single market, with implications that extend far beyond the field of health (Article 36 also mentions ‘public morality’ and ‘public security’ as possible grounds for exemption). Theoretically, the internal market could become riddled with so many exemptions granted to special interest groups that it becomes like a Swiss cheese.

For the time being, this remains only a theoretical possibility. The reality is that over the course of the last fifteen years, the EU has been less keen on the nanny state than has the British government. Not only has it been less keen, it has afforded British consumers some protection from it. You only have to look at the Nanny State Index to see that the UK has an unusually strong appetite for micromanaging people's lives. As bad as the TPD is, most of its tobacco regulations were borrowed from the UK and its not as if our representative, Anna Soubry, put up a fight against the e-cigarette regulations - she was too busy making sure the UK would be able to go above and beyond the TPD by bringing in plain packaging.

About Me

Writer and researcher at the Institute of Economic Affairs. Blogging in a personal capacity.
Author of Selfishness, Greed and Capitalism (2015), The Art of Suppression (2011), The Spirit Level Delusion (2010) and Velvet Glove, Iron Fist (2009).

"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience."